Renting a car in Reykjavík: 7 best tips

If you’re visiting Iceland, renting a car in Reykjavík is the best way to explore the city and beyond. Whether you’re planning a short stay or a full Iceland road trip, booking your car rental in Reykjavík ensures convenience, flexibility, and easy access to Iceland’s top attractions.

Reykjavík is the largest city in Iceland and the northernmost capital in the world. Its name translates to “Bay of Smokes” as it’s said that the first thing Viking settlers saw when they landed on the island was the steam coming up from the geothermal vents. Now Reykjavík has become the cultural, commercial, and industrial hub of Iceland and a city every tourist visits on their trip to the island.

While downtown Reykjavik has plenty to offer, most of Iceland’s top attractions are located outside the city, which means you’ll need a rental car to reach them. But how can you ensure you book the best rental car for your trip to Reykjavík? And where should you rent it from? In this article, we cover the top tips from renting a car in Reykjavík to help you have a great experience from start to finish.

Related links: Rent a car in Iceland; Rent a car at Iceland airport (International) with great deals

Where to Rent a Car in Reykjavík
How to Save Money on Your Car Rental
When is the Best Time to Book?
Which Type of Rental Car is Best for Your Reykjavík Trip?
Renting a Car in Reykjavík in Winter vs. Summer
How to Choose the Right Rental Car Size!
Do You Need Extra Insurance?
How to Book a Rental Car in Reykjavik
Best Car Rental Deals in Reykjavik
Frequently Asked Questions

1. Where to Rent a Car in Reykjavík: Best Pick-Up & Drop-Off Locations

When browsing car rental options in Reykjavík, you might notice that many companies let you pick up and return your car either in the city or at Reykjavík Airport (RKV). It’s important to check where the rental office is actually located, not just the pick-up and drop-off points. Many rental companies in Iceland don’t actually have a physical office in Reykjavík, which can result in high drop-off fees. This is because they may have to send someone to pick you up or deliver the car, and labor costs in Iceland are steep.

Hertz Iceland has two offices conveniently located in Reykjavík. You’ll find one office in RKV domestic airport (Reykjavík Domestic Airport, 102, Reykjavík), and the other is in downtown Reykjavík (Flugvallarvegi 5, 101 Reykjavík). Our downtown office is just a few minutes’ walk from Perlan, one of Reykjavík’s most iconic landmarks and a perfect starting point for your Iceland adventure. Perlan is an immersive museum and a restaurant rolled into one, complete with an observation deck that offers stunning views of the city.

2. How to Save Money on Your Car Rental in Reykjavík

One of the simplest ways to cut costs on your car rental in Reykjavík is to pick up and drop off your vehicle at the same location. When you return your rental car to a different spot than where you picked it up, companies often charge extra fees. This is because they may need to arrange for someone to retrieve the car and transport it back to its original location, and this process that adds additional labor costs. In Iceland, where labor costs are high, these fees can really add up.

To keep your expenses down, plan your itinerary so that your pick-up and drop-off points are the same. Compare rental deals carefully and factor in any potential drop-off charges when making your reservation. By staying flexible with your pick-up and drop-off locations, you can avoid those extra costs and keep more money in your travel budget.

3. When is the Best Time to Book a Car Rental in Reykjavík?

Never assume a rental car will be waiting for you when you arrive in Iceland unless you’ve booked in advance. It’s like turning up at a popular restaurant on a Friday night at 6 pm and hoping there’s a table available. In Iceland, vehicle supplies are even more limited, especially since COVID-19 led to some rental companies going out of business. With fewer cars on the road and demand as high as ever, booking ahead is essential to keep your travel plans on track.

Also, consider your route. Depending on your itinerary, you might need to rent a 4X4 since many roads in Iceland are not accessible with a 2WD car. And keep in mind that most rental cars here come with manual transmissions, which is the European standard. If you only drive automatics, your options will be more limited, so booking in advance becomes even more important.

4. Which Type of Rental Car is Best for Your Reykjavík Trip?

Choosing the right rental car for your Iceland adventure really depends on your Iceland itinerary and the roads you plan to take. If you’re in Reykjavík for a city break or planning a short trip to nearby attractions like the Iceland Blue Lagoon, a small economy car might be all you need. These cars are usually 2WD, perfect for urban driving, but they can be a bit tight on space if you have a lot of luggage or plan on longer journeys.

For those who need a bit more room and comfort (such as those traveling with family or a group) an SUV can be a great option. SUVs offer extra space and a smoother ride on well-paved roads, making them ideal for more relaxed trips around the city and its surroundings.

However, if you’re planning to explore Iceland’s rugged landscapes or tackle challenging terrains like gravel roads, snowy winter conditions, or even the Iceland F-roads, a 4×4 vehicle is a must. Four-wheel drive vehicles provide the extra power and stability needed for off-the-beaten-path adventures, ensuring you can safely reach those stunning remote spots without worry. It’s actually illegal to drive on Iceland F-roads without a 4WD vehicle, so if you’re planning to visit the Iceland Highlands or venture to more remote regions, make sure you have one.

5. Renting a Car in Reykjavík in Winter vs. Summer

Icelandic weather is highly unpredictable. It can be bright and sunny one minute and then turn into a hail storm the next. It’s a common saying among locals that “if you don’t like the weather in Iceland now, just wait for five minutes.” In the summer months (May to August), the weather is generally milder and more predictable, so a budget-friendly economy car can serve you well for city drives and main roads.

However, during the long Iceland winter season (September to early May), conditions can be much tougher. Sudden storms, heavy snow, and icy roads are common, making driving more challenging. In these conditions, renting a 4×4 is a much safer option. The extra traction and stability of a 4WD or SUV can give you peace of mind as you navigate Iceland’s winter roads.

No matter when you visit, it’s always wise to check the latest weather updates. Resources like the Icelandic MET Office can help you stay informed and ensure you choose the right vehicle for your adventure.

6. How to Choose the Right Rental Car Size

Just because a car is rated for five people doesn’t mean it has enough room for everyone’s luggage, especially if you’re packing winter gear or extra bags. It’s a good idea to check the details on each rental car before you click “book” to ensure it can comfortably accommodate your entire group and all your bags.

For solo travelers or couples, a compact or economy car might do the trick, though keep in mind that these cars often have limited trunk space. If you’re traveling with a small family or a group of three to four, a midsize car or SUV can provide a bit more comfort and room for luggage, making long drives much more enjoyable.

For larger groups of five or more, consider renting a larger vehicle or even two cars. This way, you won’t have everyone squeezed into one car, which is especially important in the winter when you might be carrying extra gear. Alternatively, if someone in your group has a minibus driver’s license, renting a van or minibus can be a great option for groups of six or more, ensuring plenty of space for both people and luggage.

7. Do You Need Extra Insurance for Your Reykjavík Car Rental?

All car rentals in Iceland require you to have at least basic insurance coverage. It can be tempting to just roll with the basic package to save money on your booking, but we’d definitely advise looking at more comprehensive packages. The basic package will include liability and accident coverage, but you’ll still be subject to a non-waivable excess (N.W.). The basic package also includes a collision damage waiver (CDW).

Renting a car in Iceland is different from renting in other countries. The terrain here is more treacherous and rugged, meaning there is a higher risk of damage, especially when driving on F roads. Choosing a premium package will ensure you’re protected and give you peace of mind so you can explore the island without worrying. In addition to having more protection, a premium package will reduce the amount of non-waivable excess.

Car repairs in Iceland cost a lot more than in other European countries. Labour here is higher, as is the cost to import parts. When you know your rental car can be subject to the elements and unpredictable Iceland road conditions, selecting the best coverage package makes economic sense. Our coverage packages contain add-ons like theft protection (T.P.), sand and ash protection (SAAP), and windshield protection (WSP). If you’re driving on gravel roads or through the lava fields, it’s common to have loose debris flying up at your vehicle. A cracked windscreen is the last thing you want to worry about when you’re on a fun road trip around Iceland.

If you book your car rental in Reykjavík online with Hertz Iceland, you’ll even get a 40% discount on your chosen coverage package. You can find out more information about our car coverage packages here.

How to Book a Rental Car in Reykjavik

Booking your rental car in Reykjavík is straightforward if you follow these simple steps:

Choose Your Pick-Up Location: Select either downtown Reykjavík or Reykjavík Domestic Airport (RKV) for a convenient start (remember that RKV is different than Keflavík International Airport (KEF), which is the main international airport in Iceland).
Select the Right Vehicle: Go for an economy car for city trips, an SUV for winter travel, or a 4×4 for venturing into the Highlands.
Check for Discounts & Deals: Look for online booking offers—Hertz Iceland, for example, offers 40% off insurance when booked online.
Book in Advance: Rental cars in Iceland fill up fast, especially during peak seasons.
Review Insurance & Add-ons: Make sure you’re covered for gravel damage, sandstorms, and unpredictable weather.

Best Car Rental Deals in Reykjavik

To score the best car rental deals in Reykjavík, start by keeping a close eye on special offers. Check the Hertz Iceland discounts page to see what is available. It also helps to join the Hertz Golf Plus Rewards program, which gives you exclusive perks and extra savings. Booking your rental well in advance is key, as this not only locks in a lower rate but also ensures you have plenty of options. Finally, being flexible with your travel dates can open up off-season deals that make your trip even more affordable.

Car Rental Reykjavik Frequently Asked Questions (FAQs)

- Where can I rent a car in Reykjavik?
  There are plenty of rental options in Reykjavík. You can rent a car from Hertz’s downtown offices or conveniently from Reykjavík Airport (RKV), making it easy to start your adventure.

- What is the cheapest car hire in Reykjavík?
  Economy cars are usually the most budget-friendly option in Reykjavík. Prices vary by season and booking time, so comparing rates online and booking in advance can help you snag the best deal. Keep in mind that off seasons (from September to November, and from January to May), are always the cheapest.

- Is it easy to find parking in Reykjavík?
  Parking in Reykjavík is generally manageable, though it can be challenging in the city center during busy periods. Fortunately, there are public parking garages and designated parking spots that help making parking more convenient.

- What kind of car is best for driving around Reykjavík?
  For driving in Reykjavík, a compact or economy car works best due to its ease of maneuverability and parking in the narrow city streets. However, if you plan on exploring beyond the city, especially in winter, you might consider a vehicle with 4WD.

- Do I need insurance to drive in Reykjavík?
  Yes, having insurance is a requirement. Most rental agreements include basic insurance coverage, but it’s a good idea to review your policy details and consider additional protection for a worry-free experience.

- Are car rental offices in Reykjavík open 24/7?
  Not all car rental offices in Reykjavík operate around the clock. While some locations, especially those at Reykjavík Airport, may have extended hours, it’s best to check with your chosen rental company regarding their specific operating times.

Car Rental in Reykjavík

Reykjavík is the hub for starting your trip in Iceland. Whether you’re visiting for a few days and spending time in the city or doing a two-week road trip around the island, you’ll need a good set of wheels. With Hertz Iceland, getting a car rental in Reykjavik is easy. You can pick your car up downtown or rent a car at an Iceland Airport. You get to choose! Renting a car is convenient and gives you the freedom to plan your Iceland trip exactly the way you want it.

Always book in advance to ensure you get the perfect car for your trip and receive 40% off your coverage package by booking online.

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